Japanese Acquisition in India's Ranbaxy

Competitiveness Review: An International Business Journal Vol. 21 No. 5, 2011 pp. 452-470

19 Pages Posted: 22 Feb 2014

See all articles by Justin Paul

Justin Paul

University of Puerto Rico

Pragya Bhawsar

Nirma University - Institute of Management

Date Written: February 20, 2014

Abstract

Purpose – The purpose of this paper is to examine the rationale and synergies of a Japanese firm’s acquisition of India’s leading pharmaceutical firm, Ranbaxy, and to answer the following pertinent questions: could Ranbaxy have been able to survive and succeed, had the firm not gone for this strategic sale to a foreign firm? What is the rationale for this strategic sale immediately after undertaking many major acquisitions during the previous two-year period? For what strategic reasons did a Japanese firm pay a premium price for this international acquisition?

Design/Methodology/Approach – An exploratory method was used in this study to analyze the rationale and synergies of the acquisition. The method of case writing has been followed as a design (case situation first, then goes back to the past, then comes back to the current situation).

Findings – The findings confirm that Ranbaxy got a premium price for agreeing to be acquired for their share (much higher price than the market price). Japanese firm Dai-Ichi got greater market access and control of Ranbaxy, which were driving factors for them to pay a higher share price for Ranbaxy.

Originality/Value – This original study gives insight into the points to be taken into consideration while thinking about international acquisitions.

Keywords: India, Pharmaceuticals industry, Acquisitions and mergers, Strategy, Expansion

Suggested Citation

Paul, Justin and Bhawsar, Pragya, Japanese Acquisition in India's Ranbaxy (February 20, 2014). Competitiveness Review: An International Business Journal Vol. 21 No. 5, 2011 pp. 452-470, Available at SSRN: https://ssrn.com/abstract=2399121

Justin Paul (Contact Author)

University of Puerto Rico ( email )

Ponce De Leon Avenue
00931-3300
Puerto Rico

Pragya Bhawsar

Nirma University - Institute of Management ( email )

Sarkhej-Gandhinagar Highway
Chandlodia, Via : Gota
Ahmedabad, GA Gujarat 382 481
India

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